Grey is not the new black

If you’re reading Australian Brews News, chances are you are a beer lover. As a beer lover I am sure that you are on a quest to try the many great beers that are made by the growing legion of Australian craft brewers, as well as the many excellent beers from around the world that are now available in our bottleshops.

Is it arrogant to care about your beer and want people to drink it fresh?

However, as a beer lover, did you you that the people who made many of the highly sought-after beers on the bottleshop shelves don’t actually want you drinking them?

There is great excitement about the many innovative, exciting and ‘extreme’ beers being created by brewers around the world and particularly the notable brewers in the United States.

Australian beers lovers keen to sample the beers that they hear so much about clamour to get their hands on beers from breweries such as Stone, Dogfish Head, Sierra Nevada and many more.

One of the reasons beers from these breweries are so highly sought after is that the people making them are passionate – obsessive even – about the flavour of their beers and the quality that they seek from the craft of brewing.

This passion and commitment extends as far as being demanding about the manner in which their beer is distributed to market to ensure that the beer arrives at the consumer in a condition that maintains the quality that they seek of their product. For this reason, many of the beers that Australian beer lovers crave are not legitimately available in Australia. Breweries such as Stone and Dogfish Head can’t ensure that the beer gets here at the quality they demand, while still being reasonably affordable.

The great irony is that the passion that makes the beer so good the Australian beer lover would do anything to get their hands on a bottle is often the same passion that prevents them from getting it legitimately.

Many Australian beer lovers are not aware that some of the beers they drink are imported in a way that the breweries do not approve of. This issue came up when Australian Brews News contributor Pete Mitcham submitted the excellent piece published today, “Is this Australia’s most influential beer?”

Pete initially included the call to celebrate the anniversary of the birth of Sierra Nevada by sharing a bottle or two with your friends. Before we made that call, we checked with the brewery to make sure that their beers are sold here legitimately. Below is the answer we received from Bill Manley, Brewery Communication Coordinator at Sierra Nevada.

No, we don’t have any distribution to Australia at this time so any Sierra Nevada beer you’ve seen is in fact “grey market” product sold internationally through third party distributors.

We as a company are against the practice of grey market beer. We’ve asked our distributor partners to stop shipping unauthorized beer into the marketplace but it continues to happen against our will.

In the end, we oppose this practice due to the lack of any insurance of proper handling in how it gets to its final destination. We are zealous about quality in both brewing and distribution. We require all of our beer to be shipped cold, and we require our distributor partners to store the beer in refrigerated warehouses.

The small about of international distribution we do participate in, is done via refrigerated shippers that can keep the beer cool and in good shape when it arrives in a foreign market. This refrigerated shipping is exponentially more expensive than conventional shipping and we have reason to believe that this grey market beer is not being handled with the same care that we may like.

In the end, shipping poorly handled beer does us more harm than good. In fact, we would be better off with no beer in a market, than we would with beer that does not represent the way we designed Sierra Nevada’s beers to taste.

It is a difficult enough battle to maintain shelf-life and beer quality here in the US where we have a dedicated crew of sales staff and representatives to look after it. In a foreign market with no representation it is nearly impossible to guarantee the quality of our product. Someday we may open up a more broad network of international distribution, but until then we encourage people not to purchase unauthorized beer. Sierra Nevada has lasted 30 years because of the generous word-of-mouth support of our fans. If someone has an unpleasant experience with our beer, or suspects they’ve received a damaged or poorly handled product, we go out of our way to remedy the situation. In an unauthorized market with dubious accountability we cannot guarantee the same quality we have become known for.

Bill’s response is very similar to letter Stone Brewing Greg Koch sent to a New Zealand retailer, and posted on a RealBeer.co.nz forum:

Thanks very much for the reply. I only just learned that our beers were available in NZ as a result of stumbling upon a RealBeer.co.nz thread in which several folks were relaying their negative experiences with our beers. Unfortunately, I do not believe any of them realized that a likely reason that they did not like our beer was the fact that it was too old.

I would like to respectfully request that you discontinue importing and selling our beers at this time. When we ship beer to other states in the US, or even just across town, we ship only via refrigerated transport. Same for our limited shipments to Japan. The reason that we do not ship to NZ is that we cannot ensure fresh, properly handled beer at a semi-reasonable price. As such, we also ask that others do not do it either.

Thanks much for your consideration of this request. I hope to be able to visit your country some day and enjoy some of the wonderful beers I know are being made in your country.

Despite such a strong, clear (and polite) request from these brewers, there are still distributors who feel that it is ok to import these and other beers. Given this lack of respect for the brewers it is perhaps not surprising that the beers themselves often are not treated with the respect required to get them here in an appropriate condition – and these importers certainly do not publicised the fact that the brewers have not authorised their beers for sale here.

Importing beer in a manner that ensures it arrives at the consumer in the highest possible condition and meeting all of the legal requirements is expensive. Importers who go through the appropriate steps of getting import agreements with brewers and meeting the legal requirements often do so only to see the same beers for which they have exclusive agreements sold at cheaper prices by grey importers. Apart from making their beers more expensive by comparison, legitimate importers suffer a second blow if the grey imports are out-of-date or have been poorly handled and spoiled. This gives all of the brewery’s beers a bad name in the eyes of the consumer who is unaware of the beer’s illicit history.

What’s more, reading damning reviews of their mishandled beers online only serves to prevent many great brewers from sending their beers downunder legitimately. The end result is the ‘beer lover’ who satisfies his craving this way is actually reducing his chances of getting these beers regularly and in good condition.

If you do love beer, you will respect it – and respecting beer means respecting the wishes of the person who makes it. Australian Brews News calls on all beer lovers to boycott grey market imports.

How to tell if a beer is a grey market import:

It can be difficult to tell if beers are legitimately imported, but some clues include:

use-by dates and product codes are scratched off

bottles do not have import labels. Import labels are required to include the name and address of the importer and the number of standard drinks

Australian Brews News will maintain a list of beers that we know are not legitimately available in Australia. You can see the start of the list here.

If in doubt ask retailers whether the exotic beers that they stock are grey market imports and, if so, let them know that you will not buy them. Retailers will continue to sell them as long as people are willing to buy them.

[…] shipped to countries where Stone doesn’t officially distribute and Koch is not gonna take it. Australian Brews News reports that Stone beers are illegally (may just be breach of contract) being imported to Australia […]

[…] shipped to countries where Stone doesn’t officially distribute and Koch is not gonna take it. Australian Brews News reports that Stone beers are illegally being imported to Australia along with beers from Sierra […]

Endo on November 18, 2010 at 5:40 pm

If you are talking lagers then fair enough, but ales seem to travel just fine..

I was lucky enough to try the Stones Ruination and its a bloody brilliant beer. And they are trying to say it doesnt travel?

Please….

Good on the grey importers, giving us more choice and beers to try rather then the crap that comes out of CUB.

What about all those fascinating beers that are brought into the country in one-off shipments by importers like Phoenix? Beers like Duchesse de Bourgogne (sour Flanders red ale), the st feuillien range or Boon Geuze – so many brands all brought in at one time, there’s no way they could be brought in “officially” and yet how else are retailers to get this sort of glorious diversity? I really doubt that these European brewers mind much – US brewers do sound like they’re being a little bit precious.

Plus – exactly how do you expect retailers to advise customers on all the different grey and not grey imports? Phoenix = official importer of Weihenstephaner Weizen but also unofficial importer of Andechs Weizen. Beach Avenue = official importer of Shoefferhofer but also unofficial importer of Rochefort. Maybe we should ask them to label their beers as such – ha!

Small retailers are constantly juggling price and quality and distributors in an effort to stay competitive against Coles/Woolies who will just about always manage to get these same distributors to sell to them for less and who, on top of that, are grey importers themselves! (Australian Beer Connoisseurs = Coles & International Liquor Wholesalers = Woolies see link:http://www.ethical.org.au/issues/?issue=21)

Diversity is the only niche/edge some small retailers have in this market. Managing to get hard-to-find beers is what sets them apart and consumers do give feedback on quality which in turn affects future purchasing; if the beer is affected by not being handled well then the retailer will hear about it. And these beers are “hard-to-find” because they are not being pumped through Coles/Woolies at reduced prices.

If Stone is concerned about how their beers are being shown here in Australia they should consider exporting to us: clearly there is a market for it! (even at a price they are not comfortable with)

Sorry, it’s my habit to just whack in some random name in the name field for web-replies but I felt this was important enough to put in my real name (albeit a first-name) and I only decided on this after first submitting a bogus one – I thought the Ed would delete the duplicate – sorry for multiple posting.

I agree with you in that if Stone has specifically asked for their beers not to be bought in Aus then grey-“seller beware” of the consumer backlash they may receive for going against Stone’s wishes. But welcome to the free-trade world that we live in! That said, if I were ordering for a shop I would probably think twice about ordering grey Stone beers now that I know their wishes.

But that is not to say that all grey imports are bad, like I said, there are literally hundreds of Euro & Brit beers out there that are grey and that are brought in by good, stand-up importers like Phoenix (IBS) that small retailers buy all the time – are consumers to stop buying them too?

I would see it as an excellent way for Phoenix to test out their market. Get a one-off grey shipment of brands in, see how they sell and then decide who to spend months of negotiations on to become an official importer.

Cheers Dan – wasn’t sure which one to delete, and when I realised I had already replied to the other. Thanks for clearing it up.

This all started out of a call not to drink beers that were clearly not meant to be here, such as Stone a very clear case – and even Sierra Nevada, which indicated they didn’t like them here either. The rest sort of spiralled from that and got blurred. I was happy enough for that as it’s an important issue and a good discussion.

So far as “free trade’ goes, that just means that brewers have the right to sell their beers to the otherside of the world without barriers – it doesn’t mean they have to. If they choose not to, I feel they have the right to that.

Not all grey imports are necessarily as clear cut and yes, good, stand-up importers like Phoenix (IBS) are good for beer – chiefly because they are open in their dealings and do educate the consumer. That is to be supported and respected.

Ah. We reached a middle ground (or, at least, we understand each other better).

My comment: “If Stone is concerned about how their beers are being shown here in Australia they should consider exporting to us: clearly there is a market for it! (even at a price they are not comfortable with)” was not an “import to us, or else we’ll take it from you” comment – it was more that people are clearly appreciating Stone’s product here in Oz and they should know that we are ready to buy it if they would only send it over to us :) and I’m sure that their prices would compare well with Rogue here or even some of our higher ABV craft brews – they gotta understand their beers will never be $4/650mL like they are in California not because of cost of refrigerated shipping but due to crazy excise of beer over 5%.

What about all those fascinating beers that are brought into the country in one-off shipments by importers like Phoenix? Beers like Duchesse de Bourgogne (sour Flanders red ale), the st feuillien range or Boon Geuze – so many brands all brought in at one time, there’s no way they could be brought in “officially” and yet how else are retailers to get this sort of glorious diversity? I really doubt that these European brewers mind much – US brewers do sound like they’re being a little bit precious.

Plus – exactly how do you expect retailers to advise customers on all the different grey and not grey imports? Phoenix = official importer of Weihenstephaner Weizen but also unofficial importer of Andechs Weizen. Beach Avenue = official importer of Shoefferhofer but also unofficial importer of Rochefort. Maybe we should ask them to label their beers as such – ha!

Small retailers are constantly juggling price and quality and distributors in an effort to stay competitive against Coles/Woolies who will just about always manage to get these same distributors to sell to them for less and who, on top of that, are grey importers themselves! (Australian Beer Connoisseurs = Coles & International Liquor Wholesalers = Woolies see link:http://www.ethical.org.au/issues/?issue=21)

Diversity is the only niche/edge some small retailers have in this market. Managing to get hard-to-find beers is what sets them apart and consumers do give feedback on quality which in turn affects future purchasing; if the beer is affected by not being handled well then the retailer will hear about it. And these beers are “hard-to-find” because they are not being pumped through Coles/Woolies at reduced prices.

If Stone is concerned about how their beers are being shown here in Australia they should consider exporting to us: clearly there is a market for it! (even at a price they are not comfortable with)

Again, this is a very complex issue and one that has spiralled a little from the initial point being made in all the excitement. But if a brewery makes their view clear, I think that should be respected. “If Stone is concerned about how their beers are being shown here in Australia they should consider exporting to us.” What exactly is our right to it? Isn’t the “if they don’t, we’ll just import it anyway” view the approach that is being criticised in the article you quote?

There seems to be a view that because this is being done by the small guys, it is ok but the big guys are dodgy.

IBD do a great job and again, they are one of the ones who do a great job in educating people about beer – including the perils of age and travel on beer. There would be less of an issue if there were more like them.

Surely it’s as simple as distributors spelling out that certain imports are “grey”, advising any inexperienced customers of the possible trade offs (though I’m sure most paying above the odds for imported craft beer know what they are buying) and assuming a policy of buyer beware? Will people still slag a sub-par beer off? Maybe but if the market is aware few people will take notice of the moaners. I’d rather have the opportunity to sample obscure beers with an open and informed mind than not at all.

That’s one of the issues – I don’t know of a single retailer that advertises the fact and the worst of them go to great lengths to hide it and obscuring the age of the beers.

In Stone Brewing’s case, Greg’s view (as I understand it) is he makes the best beer he can and that’s how he wants you to enjoy it. If he can’t get it to you in that condition, he would rather you didn’t get it at all. In my view – and it’s a very unpopular one apparently – that is fair enough. His passion is why the beers are so sought after in the first place and you can’t have the great beer without the passion, so I believe we should respect his view and not support the importers who are undermining him.

The broader issue though is that instead of chasing beers from brewers who would rather not send them damaged is to support our local breweries making good beers. Why seek out beers from across the world that the brewer doesn’t want us to try in bad condition when we can support the great brewers brewing here and hopefully encourage more of them?

It’s not a black and white issue , I know, but you have to draw a line somewhere and I think if a brewer doesn’t want his beer sent here that should be respected.

First of all, as I understand it, there are two issues that are blurred a bit here. We have “grey” and “parallel”.

Grey = only brought in by unauthorised distributors. Parallel = brought in by authrorised AND unauthorised distributors.

To my mind, for craft breweries, parallel shouldn’t be too much of an issue. Why?

Let’s say I owned a brewery and I was going to export to Australia… and we’re going to do this through an authrorised distributor… He (or she) would be getting the beer for the same price as our distributor in NZ, so I cannot understand how some “parallel” dealer is going to be able to compete (even if they are rowing the stuff over the Tasman – surely what they gain in cheaper shipping will be lost in the fact that they had to purchase the beer for significantly more than what our authorised distrubutor did?).

Once we sell the beer to our distributor, in this theoretical model, it is essentially their beer. We would, of course, do all we can to make their life as good as possible, and to encourage people to buy off them, and we’ll pick and stay with people we like and trust (and have common values with). But… if someone else wants to wholesale the beer in Australia and they pay the marked-up price from either of our distributors (or retailers) here, or the one over there, then that is up to them. I fail to see how they could compete with an authorised distributor though. It looks like the solution for the US breweries with greymarket issues would be to get on board with an authorised Australasian wholesaler. The demand is obviously here.

Economies of scale apply, and may distort this simple example, but they go both ways (i.e. for an against the parallel distributor)… and then there are issues of “imports” that are contract brewed in Aus/NZ (but I couldn’t really give a shit about them or their parallel imported siblings).

I’ve had good and bad grey imports. If there is an authorised importer, then I’ll always go that way. But if I see a grey import, I might just have a flutter… c’est la vie and caveat emptor

ps. Would this had ever come up if people hadn’t expressed their negative opinions on some beers?

That’s the problem Stu. As a person who cares about the quality of your beer you would appoint a distributor who will ship and sell the beer to the standard that you brewed it. That costs money. As Sierra Nevada advised my “The small about of international distribution we do participate in, is done via refrigerated shippers that can keep the beer cool and in good shape when it arrives in a foreign market. This refrigerated shipping is exponentially more expensive than conventional shipping and we have reason to believe that this grey market beer is not being handled with the same care that we may like.”

Parallel importers aren’t competing fairly because they are not obliged to look after the beer the way the official importer is and don’t have the “exponential costs”.

Parallel is damaging because it forces good quality, legitimate importers who do the right thing to complete against people selling the same but inferior product. I have spoken to a lot of retailers and many admit they will buy the cheaper one – their customers won’t have anything to compare it to. That is the flaw in your “If there is an authorised importer, then I’ll always go that way” statement. The retailers don’t tell you which one you are buying and you do not have a choice. The buyer can only beware if there is a way to tell.

“ps. Would this had ever come up if people hadn’t expressed their negative opinions on some beers?” That is why some brewers are up in arms about it – theyir beers are in demand because they are passionate about it – and then they see their beers being judged and slammed by people who think the beers are bad and know not why…to my mind that is a good reason to raise the issue.

But you have legitimate importers bringing in unrefrigerated beer from as far as Europe, a much longer trip than Cali-to-Aus, and they seem to be surviving the trip ok. Just like the “grey” beers, some of them have been stunning and some have been worse than the Oaked beer that first alerted me to this whole issue.

The beers that are chosen by the distributor (authorised or not), and the pockaging it comes in, is as much of the issue here. I’ve tried loads of Baird’s beer in bottles and they’ve almost all been fantastic… on tap, I’ve tried a few, and they’ve been in rather disappointing condition.

I’m still absolutely convinved that that majority of these problems would go away if Australia had a legitimate import channel for US craft beer (again, I don’t really care about what’s happenning with parallel Heineken, Peroni or Bud). I know Beerstore in NZ were selling Rogue, which I assume were “grey”, but they don’t appear to be selling any now that the Cult Beer Store is selling “happy” Rogue. The prices, from memory, were about the same…

I think the issue really resides at the brewery end… what comprimises will they make for the growth of their business? If they are making the beer and selling via distibutors, then they must either trust those distributors to work according to their guidelines or simply get rid of them. If they care to the absolute extreme end, then they’ll just have a brewpup with on-licence sales only… maybe a little stall at the local market if they really wanted to be a bit risque and trust someone else to decide how to store the beer and when to drink it. Distribution is just one cog in the quality wheel – beers can be mistreated by pubs, by off-licences, by the consumer. Hell, even the brewery… I’ve tasted a bunch of imports that I know can’t have been good leaving the brewery!

I want to try different beers… and I’m certainly in no position to head off on a tour of the West Coast of USA, or a cycling tour around Belgiums great breweries, so sometimes greymarket beers are my only option. If they are there I might buy one or two. Thankfully we have a thriving beer scene here in NZ and I find it hard enough just getting through local releases.

I do see your point but, on the whole, I simply disagree… it’s just not a huge ethical issue to me. We’re not exactly talking about sow crates here!

I’ll repeat the Wilco song lyrics that I said back then (I reckon Sam from Dogfish might appreciate it):
…if the whole world’s singing your songs
And all you’re paintings have been hung
Just remember what was yours is everyone’s from now on
And that’s not wrong or right
But you can struggle with it all you like
You’ll only get uptight

— Wilco – “What Light” (off “Sky Blue Sky”)

Slainte mhath
Stu

ps. Great discussion… How about a debate around this at AIBA or BrewNZ? I’ll have Neil Miller on my side (threatening him with the withdrawal of Hop Stoopid if he loses!). Perhaps we could convince Greg to come down, I know he can be very persuasive.

All good points Stu and, as I said, the real point of this debate occurs in the margins where there’s not always the good faith showed by the many.

Still, when you say “If they are making the beer and selling via distibutors, then they must either trust those distributors to work according to their guidelines or simply get rid of them.”

In the case of Stone, to me it’s pretty cleat cut. They do not want their beers sold where they can’t guarantee their product at a reasonable price. They have gone out their way to make that clear. Yes, people will always get their hands on it somehow but to me it says something about a business’ underlying approach when they do it despite such clear indications that the brewer doesn’t want it done. I don’t accept it’s our fundamental human right to have every beer known to man just because I want it.

Stone beers cost up to just $4US a 650mL bottle in Cali. Even without the cost if shipping their 7+% abv beers are going to to get slammed by Australian excise such that they appear far more exxie than when in the US. However prices wouldn’t seem so bad when compared with 650mL Rogue in Aus or even when compared with premium Aussie beers. And after excise I’m not sure the difference in refridgerated and non-refrigerated shipping is going to be all that great…